| McKinsey Classics | November 2016 |
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| Thinking about risk |
| In 2007, the Canadian dollar’s value rose 30 percent against the US dollar. Canadian producers knew they would be less competitive in the United States, but few understood that these changes would also affect the buying behavior of Canadians, 75 percent of whom live within 100 miles of the border. As consumers merrily headed south to buy cars, snowmobiles, and the like, Canadian companies had to cut prices in their domestic market. Hedging to cover their loss of competitiveness in the United States couldn’t protect them from the price squeeze at home. There’s no formula for anticipating how risk will cascade through economies, but in very uncertain times, executives must learn to foresee and prepare for it. “Risk: Seeing around the corners,” a classic 2009 article, shows you how. |
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Behavioral science shows that human behavior is quite predictable. During interactions with customers, for example, a company should get anything unpleasant out of the way at the start, so the experience ends on a positive note that increases their loyalty. This is a powerful insight for any service business, yet relatively few take it into account in designing interactions with customers. Behavioral science offers a simple, low-cost way to make them more satisfied with your company.
How behavioral science improves the customer experience → |
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